Scorpio Tankers president Robert Bugbee has sought to allay fears of aframaxes muscling in on the clean tanker trade.
And the US-based executive told a Fearnley Securities webinar that his company has instead been asked to “dirty up” product carriers to handle crude cargoes.
Bugbee said there was a fear in the market of a “real stoppage” to cargo flows arising from refining capacity and the ability to get refined products to the market.
“That’s what’s creating the refining margins expanding,” he said.
“And I think if we get into a winter that’s normal, it’s going to be really, really exciting. I’m confident in both crude and products. I think it’s great when we’re both working together,” the president added.
Bugbee went on to say that he believes “Christmas is coming early” to the product tanker market in the middle of the summer and the off-season.
“We might have to wait until the new year for the crude,” he said.
The Scorpio man was also asked whether, with crude production cuts and lower Russian volumes impacting aframax rates, more ships will switch to clean cargoes.
“I think that’s definitely what some investors are worried about,” Bugbee acknowledged.
“But first of all, the spread at this particular point is not that wide. And secondly, there is quite a big front-up dollar expense to start to clean up an aframax-sized tanker,” he told the webinar.
‘Crude has been good’
“Right now, there’s nothing to do. Crude has been good. Aframaxes have been great during this part of the year,” the president said.
“So I don’t think they’re going to react to this first spread point. And secondly, three months is not that far away. You’re right into the winter season,” he added.
Bugbee also said his company has spotted areas where, regardless of Opec cuts, owners will see potentially increased aframax activity.
And on the other hand, clean ships could capture more of the crude market.
“We’ve been having people who have chartered our ships to take them dirty. And recently, we’ve got instructions to dirty one more up now from a charterer — that will dirty up next week,” Bugbee added.
